Category Archives: China

Estimating the Costs of Cyber Attacks Against the U.S., Billions

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Cyberattacks cost the United States between $57 billion and $109 billion in 2016

The report published by the White House Council of Economic Advisers examines the cyberattacks cost that malicious cyber activities cause to the U.S. economy.

Paganini: How much cost cyber attacks to the US? According to a report published by the White House Council of Economic Advisers last week, the cyberattacks cost between $57 billion and $109 billion in 2016, and things can go worse in the future.

“This report examines the substantial economic costs that malicious cyber activity imposes on the U.S. economy. Cyber threats are ever-evolving and may come from sophisticated adversaries. Due to common vulnerabilities, instances of security breaches occur across firms and in patterns that are difficult to anticipate.” states the report.

“Firms in critical infrastructure sectors may generate especially large negative spillover effects into the wider economy.”

The report analyzed the impact of malicious cyber activities on public and private entities, including DoS attacks, sabotage, business disruption, and theft of proprietary data, intellectual property, and sensitive financial and strategic information.

Damages and losses caused by a cyber attack may spill over from the initial target to economically linked organizations. More exposed are critical infrastructure sectors, at attack against companies and organization in this industry could have a severe impact on the US economy.

The document warns of nation-state actors such as Russia, China, Iran, and North Korea, that are well funded and often conduct sophisticated targeted attacks for both sabotage and cyber espionage.

“Finally, and perhaps most important, if a firm owns a critical infrastructure asset, an attack against this firm could cause major disruption throughout the economy.” reads the report.

“Insufficient cybersecurity investment in these sectors exacerbates the risks of cyberattacks and data breaches. The economic implications of attacks against critical infrastructure assets are described in more detail later in the paper. “

US cyberattacls cost

The reports also warn of devastating cyberattacks that would target sectors that are internally interconnected and interdependent with other sectors.

The report offered little in the way of new recommendations on improving cybersecurity, but noted that the situation is hurt by “insufficient data” as well as “underinvestment” in defensive systems by the private sector.

“Cyber connectivity is an important driver of productivity, innovation, and growth for the U.S. economy, but it comes at a cost. Companies, individuals, and the government are vulnerable to malicious cyber activity.” concludes the report. “Effective public and private-sector efforts to combat this malicious activity would contribute to domestic GDP growth. However, the ever-evolving nature and scope of cyber threats suggest that additional and continued efforts are critical, and the cooperation between public and private sectors is key.” 

***

The forecast of the cost damage in coming years….

In part from Forbes: In 2015, the British insurance company Lloyd’s estimated that cyber attacks cost businesses as much as $400 billion a year, which includes direct damage plus post-attack disruption to the normal course of business. Some vendor and media forecasts over the past year put the cybercrime figure as high as $500 billion and more.

From 2013 to 2015 the cyber crime costs quadrupled, and it looks like there will be another quadrupling from 2015 to 2019. Juniper research recently predicted that the rapid digitization of consumers’ lives and enterprise records will increase the cost of data breaches to $2.1 trillion globally by 2019, increasing to almost four times the estimated cost of breaches in 2015.

The World Economic Forum (WEF) says a significant portion of cybercrime goes undetected, particularly industrial espionage where access to confidential documents and data is difficult to spot. Those crimes would arguably move the needle on the cyber crime numbers much higher.

Large banks, retailers, and federal agencies make the headlines when they are hacked – but all businesses are at risk. According to Microsoft, 20% of small to mid sized businesses have been cyber crime targets.

For anyone who wants to tally their own bill from cyber crime, check out Cyber Tab from Booz Allen. It is an anonymous, free tool that helps information security and other senior executives understand the damage to companies inflicted by cyber crime and attacks. More here.

 

Where is the Legislation/Law Mandating Against Cyber Intrusions?

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No one in Washington DC or media talks about the ever constant cyber attacks against all things United States.

There have been countless hearings on The Hill about Russian operations against the election architecture in the United States as well as other allied countries. While Russia is one of the top threats, Iran and North Korea are also guilty, yet China likely ranks number two behind Russia.

So, anti-Trump people inside the Beltway blame the Trump White House for the lack of leadership on the issue(s) especially when it comes to protections on the voter-roll databases at the state level and the learning curve of vulnerabilities of the voting machines themselves. So…where are these lawmakers and the bills they have introduced for debate, committee and eventual passage in both Houses of Congress anyway?

Who is protecting data across the board, our data? Where is the Department of Homeland Security and the FBI on the matter? Both those agencies were assigned to collaborate with threatened State Elections Commissions during the General election. Remember that?

This all began during the Obama administration where the ultimate punishment was to expel Russian diplomatic officials, close two dachas and the Russian compound in San Francisco. Has that sent a message to Moscow and fixed the problem(s)? NO….

There are thousands of experts outside the Federal government that do offer assistance with investigations and attributions and they too can offer some in sight into legislative frameworks and yet no one knows if that has been forthcoming.

*** Russian Attacks Will Continue

UPDATE: As the nation’s top intelligence chiefs testified before the Senate Intelligence Committee Tuesday, spelling out the very real threat Russia continues to pose to our democracy, Director of National Intelligence Dan Coats admitted “there is no single agency leading the United States’ efforts to respond to and combat Russian election meddling.”

Multiple Senators on the panel expressed their concern for President Trump’s ongoing unwillingness to acknowledge Russian interference in the 2016 election, echoing a common sentiment among national security experts that an absence of leadership at the top is hindering U.S. efforts to fight back.

CNN:

… Coats said Tuesday “there should be no doubt” that Russia sees the 2018 US elections as a target.

Coats and the other top national security officials told the Senate Intelligence Committee on Tuesday that they still view Moscow as a threat to the 2018 elections, a stance that appears at odds with President Donald Trump’s repeated dismissals of Russian election meddling.

“We expect Russia to continue using propaganda, social media, false-flag personas, sympathetic spokesmen and other means to influence, to try to build on its wide range of operations and exacerbate social and political fissures in the United States,” Coats said at a hearing on worldwide threats. “There should be no doubt that Russia perceives its past efforts as successful and views the 2018 US midterm elections as a potential target for Russian influence operations.”

(…)

Sen. Angus King, I-Maine, pressed on the disparity between the intelligence community’s viewpoint and the president’s — urging the intelligence chiefs to persuade the president to accept their findings that Russia interfered in the 2016 election.

“My problem is, I talk to people in Maine who say the whole thing is a witch hunt and a hoax ‘because the President told me’,” King said. “There’s no doubt, as you all have testified today, we cannot confront this threat, which is a serious one, with a whole of government response when the leader of the government continues to that deny it exists.”

The Atlantic:

John Sipher, a former chief of station for the CIA who served for 28 years in Russia, Europe, and Asia, told me that the intelligence community will continue to be focused on Russia’s threat “no matter what the White House says or doesn’t say.” Ultimately, though, it will be up to Trump to implement meaningful changes.

“The IC is not the most important in this case,” Sipher said, referring to the intelligence community. “They may uncover what the Russians are up to but they can’t really defend against it or take actions to deter it, unless the President supports a covert action effort to screw with the Russians, like with a cyber attack.”

“Tightening up our social media, protecting voter-registration systems and procedures—those things are beyond the ability or mandate of the IC,” Sipher said. “And I don’t think we have done nearly enough to deter or defend against Russian attacks.

US intel chiefs unanimous that Russia is targeting 2018 elections (CNN)

Russia Will Meddle in the Midterms (The Atlantic)

No Agency Leading U.S. Response to Russian Election Meddling, Says Intel Chief (The Daily Beast)

As the Senate Intelligence Committee hears from the nation’s top intelligence and national security officials on worldwide threats, a prepared written assessment warns of ongoing Russian efforts to undermine democracy.

NBC News:

“Foreign elections are critical inflection points that offer opportunities for Russia to advance its interests both overtly and covertly,” says the assessment. “The 2018 US mid-term elections are a potential target for Russian influence operations.”

(…)

“We assess that the Russian intelligence services will continue their efforts to disseminate false information via Russian state-controlled media and covert online personas about US activities to encourage anti-US political views,” the statement says.

“Moscow seeks to create wedges that reduce trust and confidence in democratic processes, degrade democratization efforts, weaken US partnerships with European allies, undermine Western sanctions, encourage anti-US political views, and counter efforts to bring Ukraine and other former Soviet states into European institutions.”

In his opening statement, Vice Chairman Mark Warner (D-VA) noted President Trump’s absence of leadership on the issue.

Sen. Mark Warner, D-Va., the top Democrat on the committee, said in prepared remarks that “the President inconceivably continues to deny the threat posed by Russia. He didn’t increase sanctions on Russia when he had a chance to do so. He hasn’t even Tweeted a single concern. This threat demands a whole-of-government response, and that needs to start with leadership at the top.”

U.S. intel agencies expect Russia to escalate election meddling efforts (NBC News)

Worldwide Threat Assessment (pdf)

Do You Know What CTIIC is? You Should

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First…there is no policy as admitted in a Senate Intelligence Hearing of the heads of the intelligence agencies and confirmed by Senator Angus King (Maine).

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CTIIC is the federal lead for intelligence support in response to significant cyber incidents, working—on behalf of the IC—to integrate analysis of threat trends and events, build situational awareness, and support interagency efforts to develop options for degrading or mitigating adversary threat capabilities.

The idea of creating a cyber threat framework came from observations among the US policy community that cyber was being described by different agencies in a variety of ways that made consistent understanding difficult. There are over a dozen analytic models being used across government, academia, and the private sector. Each model reflects the priorities and interests of its developer, but the wide disparities across models made it difficult to facilitate efficient situational analysis that was based on objective data.

 

The framework will be scalable and facilitate data sharing at “machine speed.” Implementation within the USG will include processes to reduce or eliminate double-counting of threat data.

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So….
In 2017 Equifax confirmed it has suffered a massive data breach, cyber criminals stole sensitive personal records of 145 million belonging to US citizens and hundreds of thousands Canada and in the UK.

Attackers exploited the CVE-2017-5638 Apache Struts vulnerability. The vulnerability affects the Jakarta Multipart parser upload function in Apache and could be exploited by an attacker to make a maliciously crafted request to an Apache web server.

The vulnerability was fixed back in March, but the company did not update its systems, the thesis was also reported by an Apache spokeswoman to the Reuters agency.

Compromised records include names, social security numbers, birth dates, home addresses, credit-score dispute forms, and for some users also the credit card numbers and driver license numbers.

Now experts argue the Equifax hack is worse than previously thought, according to documents provided by Equifax to the US Senate Banking Committee the attackers also stole taxpayer identification numbers, phone numbers, email addresses, and credit card expiry dates belonging to some Equifax customers.

This means that crooks have all necessary data to arrange any king of fraud by steal victims’ identities. More here.

Further, the Trump administration appears to omitted any reference to the Chinese cyber threat domestically….here is a clue on their activity and how they cannot be trusted…and we have not even mentioned Russia..

In 2012 Chinese companies Huawei and ZTE  were considered high threat risks to the United States and sadly, both were introduced again at this same Senate hearing on February 13, 2018.

China’s government has denied reports that it spied on the servers at the African Union’s Chinese-built headquarters for more than five years, gaining access to confidential information.

In an investigation published by French newspaper Le Monde, China, which also paid and built the computer network at the AU, allegedly inserted a backdoor (in French) that allowed it to transfer data. The hack wasn’t detected until Jan. 2017 when technicians noticed that between midnight and 2 am every night, there was a peak in data usage even though the building was empty. After investigating, it was found that the continental organization’s confidential data was being copied on to servers in Shanghai.

China’s ambassador to the AU dismissed the reports as “absurd” and “preposterous.” Kuang Weilin told reporters in Ethiopia that it was “very difficult to understand” Le Monde’s claims and that the story was certain to “create problems for China-Africa relations.”

The revelations come as African presidents convene in Addis Ababa to attend the continental summit on governance. In 2012, when the AU building was completed, it was signified as a symbolic gesture aimed at solidifying Sino-Africa relations. The landmark 20-story office tower overlooking a pearl-shaped conference center was “a gift” from the Chinese government to help African nations integrate better and improve their institutional capacity.

But the alleged data theft puts a spin on that rosy affair and might strain the relationship between the two sides. China is heavily involved in Africa, with its companies and entrepreneurs conducting trade and investing heavily in African countries. Chinese aid has also been blamed for propping up authoritarian regimes, constructing shoddy roads and infrastructure built by imported Chinese workers, and focusing mainly on countries home to oil, minerals, and other resources that China needs. But China is also cultivating the next generation of African leaders, with Beijing taking thousands of African leaders, bureaucrats, students, and business people to China for training and education. More here.

For sure there is no policy and lawmakers are dumbfounded on introducing any kind of offensive or consequential legislation. Hello Angus?

State Dept Proposes Lead Agency on Economic/Cyber Bureau

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This sounds great until one considers there is no lawful cyber policy against any nation, rogue or otherwise where there are consequences for hacks, malicious malware or cyber theft. Meanwhile, all cyber units within the Federal government as well as independent outside corporations are well aware of China, North Korea, Russia and proxies are the constant and proven cyber threats to the United States without punishment.

Further, there are two details that are omitted in the summary below, the global actions of cybercurrencies and how governments are plotting regulations but more the global economic agenda. There is no way to stop a borderless world.

The 2016 State Department posture on foreign cyber threats is here.

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Tillerson proposes new unified bureau at State to focus on cyber

Secretary of State Rex Tillerson is proposing the consolidation of two separate offices at the State Department to form a single bureau that will focus on a wide range of cyber issues.

A State Department spokesperson told The Hill that the two offices, the Office of the Cybersecurity Coordinator and the Bureau of Economic Affairs’ Office of International Communications and Information Policy, would be unified in order to form the proposed Bureau for Cyberspace and the Digital Economy.

“The combination of these offices in a new Bureau for Cyberspace and the Digital Economy will align existing resources under a single Department of State official to formulate and coordinate a strategic approach necessary to address current and emerging cyber security and digital economic challenges,” Tillerson said in a Tuesday letter to House Foreign Affairs Committee Chairman Ed Royce (R-Calif.). 

“The Department of State must be organized to lead diplomatic efforts related to all aspects of cyberspace,” the secretary added.

The decision comes after Tillerson faced scrutiny from both parties last year over his decision to fold the standalone Office of Cybersecurity Coordinator into an economic-focused bureau as part of his broad efforts to reorganize the agency.

Royce first relayed the news during a cyber diplomacy briefing on Tuesday that focused on the need to engage the international community on cybersecurity-related issues.

“The proposal will elevate the stature of the department official leading cyberspace policy to one that is confirmed by the U.S. Senate — an assistant secretary — to lead high-level diplomatic engagements around the world,” the secretary argued.

Last year, Royce introduced a bill, titled the Cyber Diplomacy Act, that seeks to restore a State Department office specifically focusing on cyber diplomacy efforts. The House passed the bill last month, which also calls for the official leading the cyber office to have the rank of ambassador.

Royce said Tillerson’s proposal is a “welcomed” move, but continued to vouch for the Cyber Diplomacy Act to “help keep America safe and strong.”

“Cyberspace is vital to America’s national security, and to our economy. That’s why I have long called for the State Department to have a high-ranking diplomat who can confront the full range of challenges we face online,” Royce said in a statement in response to Tillerson’s letter.

“The Foreign Affairs Committee will continue to work with the department and our colleagues in the Senate to ensure this assistant secretary and bureau is empowered to engage on the full range of cyber issues, dealing with security, human rights, and the economy,” he continued.

A State Department spokesperson said the proposal is part of an effort to spearhead cyber policy and address cybersecurity on a global scale.

“The State Department recognizes its leadership role of diplomatic efforts related to all aspects of cyberspace and the need to have an effective platform from which to engage relevant global stakeholders and exercise that leadership role,” the spokesperson said.

Under Tillerson’s proposal, the cyber bureau would seek to establish a “global deterrence framework” in an effort to outline how countries can respond when other nations “engage in malicious cyber activities.”

It would also seek to develop strategies against adversaries, promote programs that help with cyber threat prevention and responses, establish partnerships to keep the nature of the Internet open with a cross-border flow of data and open lines of dialogue for diplomatic officials to further engage on such issues.

At the start of the hearing, Royce emphasized the importance of the State Department’s role in cybersecurity issues as other countries attempt to impose control over cyberspace.

“The department’s role becomes essential when you consider that it’s not just computer networks and infrastructure that the United States needs to protect. The open nature of the internet is increasingly under assault by authoritarian regimes, like China, that aggressively promote a vision of ‘cyber sovereignty,’ which emphasizes state control over cyberspace,” Royce said in his opening remarks.

Three cyber experts testified before the lawmakers for roughly three hours on Tuesday, including the State Department’s former top cyber diplomat.

Chris Painter, the agency’s former cybersecurity coordinator, had already emphasized the need for the State Department to assume a key role in cyber policy before Tillerson’s proposal became public.

“[G]iven the international nature of the threats and the technology itself, that the State Department should play a leading role in that effort and that effective cyber diplomacy,” Painter told the lawmakers.

“For the U.S. to continue to lead, as it must, cyber issues must be re-prioritized and appropriately resourced at the State Department. Moreover, it is important that the position of the individual leading these efforts be at a very high-level — not buried in the bureaucracy or reporting through any one functionally or perspective limited chain of command,” he added.

Under the proposal, an assistant secretary will lead the new bureau and report to the Under Secretary for Economic Growth, Energy and the Environment.

Painter praised Tillerson’s plan after Royce relayed Tillerson’s proposal at the hearing. But he argued that it “makes a lot more sense” for the assistant secretary to report to the undersecretary for political affairs rather than economic affairs.

“I applaud the fact that they’ve taken action. I think it’s great they’re elevating it. That’s exactly what should be done,” Painter said.

In July, Painter left his top position shortly before Tillerson alerted Congress about his plans to close the cybersecurity office.

 

CIA Warning on Russia and China

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2018-01-29 Treasury Caatsa 241 Final by CNBC.com on Scribd

  The Democrats on The Hill have been complaining for months about the Trump administration easy approach and policy regarding Russia. There may be some truth to that conclusion, however there are some very aggressive actions underway at Treasury and CIA that tell another story of sorts. While there are some additional sanctions that have been applied, there are some key people listed as being close to Putin and the Kremlin that have been identified as people of concern.

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The Democrats need to calm down and recite some facts regarding the actions of the Trump administration with the building approaches regarding shady characters of the Kremlin and Russian influence or operatives.

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MOSCOW (Reuters) – The U.S. Treasury Department named major Russian businessmen including the heads of the two biggest banks, metals magnates and the boss of the state gas monopoly on a list of oligarchs close to the Kremlin.

The list, drawn up as part of a sanctions package signed into law in August last year, does not mean those included will be subject to sanctions, but it casts a potential shadow of sanctions risk over a wide circle of wealthy Russians.

Russian President Vladimir Putin’s inner circle is already subject to personal U.S. sanctions, imposed over Russia’s 2014 annexation of Ukraine‘s’ Crimea region.

But the so-called “oligarchs’ list” that was released on Tuesday, prompted in part by Washington’s belief the Kremlin meddled in the 2016 U.S. presidential election, covers many people beyond Putin’s circle and reaches deep into Russia’s business elite.

LONDON (Reuters) – CIA Director Mike Pompeo said Russia will target U.S. mid-term elections later this year as part of the Kremlin’s attempt to influence domestic politics across the West, and warned the world had to do more to push back against Chinese meddling.

In an interview with the BBC aired on Tuesday, U.S. intelligence chief Pompeo said Russia had a long history of information campaigns and said its threat would not go away.

Asked if Russia would try to influence the mid-term elections, he said: ”Of course. I have every expectation that they will continue to try and do that.

In an interview with the BBC aired on Tuesday, U.S. intelligence chief Pompeo said Russia had a long history of information campaigns and said its threat would not go away.

Asked if Russia would try to influence the mid-term elections, he said: ”Of course. I have every expectation that they will continue to try and do that.

“But I am confident that America will be able to have a free and fair election. That we’ll push back in a way that is sufficiently robust that the impact they have on our election won’t be great.”

He also said the Chinese posed a threat of equal concern, and were “very active” with a world class cyber capability.

“We can watch very focused efforts to steal American information, to infiltrate the United States with spies, with people who are going to work on behalf of the Chinese government against America,” he said.

“We see it in our schools, in our hospitals and medical systems, we see it throughout corporate America. These efforts we have to all be more focused on. We have to do better at pushing back against Chinese efforts to covertly influence the world.”

GLOBAL INFLUENCE

The Kremlin, which under Vladimir Putin has clawed back some of the global influence lost when the Soviet Union collapsed, has denied meddling in elections in the West. It says anti-Russian hysteria is sweeping through the United States and Europe.

In the interview, Pompeo also repeated his message that North Korea was close to developing missiles which could be used in a nuclear attack on the United States.

“I think that we collectively, the United States and our intelligence partners around the world, have developed a pretty clear understanding of (North Korean leader) Kim Jong Un’s capability,” he said.

“We talk about him having the ability to deliver a nuclear weapon to the United States in a matter of a handful of months.” More here.